The Securities and Exchange Commission of Pakistan (SECP) has announced regulatory relief to dilute the impact of the coronavirus for the corporate sector in Pakistan.
In this regard, the SECP notified the regulatory relief for the companies. It mentions:
Considering the gravity of the pandemic on the public health and the lockdown situation in the country, the companies are facing various difficulties, while ensuring compliance with regulatory requirements related to communication with shareholders, holding general meetings and issuance of financial statements, etc.
The commission in the discharge of its statutory responsibilities for beneficial regulation of corporate sector seeks to clarify as follows:
- Impact of general relaxation in holding annual general meetings on annual financial statements and filing deadline for first-quarter financial statements: In view of Circular 06/2020 dated March 22, 2020, a 30-day general extension in holding an annual general meeting (the “AGM”) was provided to all companies facing difficulties in holding their annual general meetings for year-ended December 31, 2019.Now, the said extension is being simultaneously extended to listed companies under Section 223(2) of the act, for laying their annual financial statements in the AGM. Moreover, the SECP shall facilitate companies for grant of extension in the filing of first-quarter financial statements on application sent to the SECP via email.
- The requirement of disseminating information to shareholders through post: The companies can circulate the notices of general meetings and annual reports to members, by post or electronically. Further, the public companies, which are already required under SRO 1196 (1)12019 dated October 3, 2019, to post the notice of meeting on their website in English and Urdu languages along with the annual financial statements can post the same at PUCAR system of Pakistan Stock Exchange Limited (for listed companies) and also publish the notice of meeting in one English and one Urdu language newspaper.Companies should draw attention of members through public notice in print media and inform them about the electronic source from where notice, reports, etc. may be accessed. Moreover, companies should also endeavor to disseminate the notices and reports to the members electronically via email addresses, WhatsApp numbers, etc.
- Filing of interim financial statements other than first-quarter financial statements: The law does not provide for any relaxation in the timeline for filing quarterly financial statements except for first-quarter financial statements. However given the extraordinary circumstances, companies are advised to prioritize public safety, while ensuring corporate compliance, and the SECP shall give due consideration to all underlying circumstances while enforcing regulatory compliance.
- The requirement to hold a board of directors (BOD) meeting once in every quarter: The law does not provide for any specific relaxation in requirement of holding of the BOD meeting once in every quarter. However, in terms of Section 179 of the Companies Act companies are encouraged to pass a resolution by the directors through circulation. Given the extraordinary circumstances, companies are advised to prioritize public safety, while ensuring corporate compliance, and the SECP shall give due consideration to all underlying circumstances while enforcing regulatory compliance.
- Companies to make necessary work arrangements for ensuring regulatory compliances: As the safety of employees is a priority of the companies during the coronavirus (COVID-19) outbreak, therefore, the companies are encouraged to make necessary arrangements for the use of technology and related applications in order to enable them to work from home to meet the regulatory compliances.